CCI modifies apartment buyers agreements in two more DLF cases

Jan 14 2013, 21:38 IST
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SummaryCompetition Commission of India today said modifications suggested by it to the agreement between DLF and apartment buyers of the realtor's Belaire project would be applicable to two more projects of the company, namely Park Place and Magnolia.

Competition Commission of India (CCI) today said modifications suggested by it to the agreement between DLF and apartment buyers of the realtor's Belaire project would be applicable to two more projects of the company, namely Park Place and Magnolia.

The modifications to apartment buyer agreements follow a direction from Competition Appellate Tribunal (COMPAT), which is hearing DLF's appeal against the fair trade regulator's Rs 630 crore penalty and other sanctions against it.

After finding DLF abusing its dominant position, CCI had in August 2011 imposed the penalty on DLF and had asked the company to suitably modify its apartment buyer agreement to remove the unfair conditions.

After hearing DLF's appeal, COMPAT, however, asked CCI in March 2012 to pass another order specifying the extent and manner in which terms and conditions of the Apartment Buyer's Agreement needed to be modified.

Consequently, CCI passed a supplementary order on January 3 to modify the buyer agreement DLF's Belaire project at Gurgaon in national capital region.

In two separate supplementary orders announced today, CCI has now said the modifications suggested for the Belaire project buyers agreement would be applicable for DLF's Park Place and Magnolia projects as well.

"The same modifications suggested by the Commission in its order in case (involving Belaire project).... shall be applicable" to cases related to Park Place and Magnolia projects, the CCI said.

CCI had earlier asked DLF "to cease and desist from formulating and imposing such unfair conditions in its agreement with buyers in Gurgaon" and to "suitably modify unfair conditions imposed on its buyers".

The Commission had left it to DLF to modify unfair conditions, but the company preferred an appeal before COMPAT, which directed the CCI to pass an order specifying the extent and manner in which the terms and conditions of the Agreement need to be modified.

Explaining the various modifications in its 104-page supplementary order in Belaire case, CCI had said DLF enjoyed unilateral right to increase or decrease super area at sole discretion without consulting allottees who were bound to pay additional amount or accept the reduction in area.

CCI said "a mere letter from the company that the super area has increased is not sufficient" and the builder would have to give relevant information to the allottee as to how the super area stands increased.

The changes have also been made in clauses that provided for heavy penalties for default of allottee, but comparatively "insignificant penalties on DLF for its own defaults".

The

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